Brent Tops $100 as Maritime Attacks Sever Oil Routes
Simultaneous naval attacks on critical transit chokepoints have pushed Brent crude above $100 a barrel, threatening major supply disruptions and severe price spikes.
Brent crude surged above $100 a barrel on Thursday for the first time since May, rallying more than 30% in July. The price jump follows a rapid deterioration in maritime security across the Middle East and the Black Sea. "The oil market is now dealing with wars on multiple fronts," said Helima Croft, head of global commodity strategy.
The most acute pressure point is the Strait of Hormuz, where ship traffic has collapsed following the failure of a June 17 US-Iran memorandum of understanding. "After the collapse of the MOU, we have entered the worst phase of this conflict for merchant shipping," said Dimitris Maniatis, CEO of maritime risk service Marisks. At least a dozen tankers have been struck this month alone. "The primary reason is the fact that the Iranians want to assert more authority and control over what is happening in the Strait of Hormuz," Maniatis said. According to the International Maritime Organization, 61 commercial ships have been attacked in the broader region since March 1, resulting in at least 17 seafarer deaths.
Iran's Houthi allies have opened a secondary front, firing on two Saudi tankers in the Red Sea after declaring a maritime embargo against Riyadh. This directly threatens millions of barrels per day of Saudi exports that were redirected to the kingdom's western coast to avoid Hormuz. However, routing this oil through the Suez Canal presents severe logistical hurdles. Supertankers cannot transit the canal fully loaded due to draft restrictions, forcing complex and time-consuming partial offloading operations that stretch a roundtrip to Asia to roughly eight weeks, according to Matt Smith, director of commodity research at Kpler.
The supply crunch extends well beyond the Middle East. The Caspian Pipeline Consortium has halted tanker loadings at the Russian port of Novorossiysk following Ukrainian attacks on vessels. This threatens Kazakhstan, which relies on the pipeline for 80% of its crude exports, with potential production shut-ins from its 1.7 million barrels per day output. Furthermore, Ukrainian strikes have knocked more than half of Russia's refinery capacity offline.
Middle East sea shipments are increasingly facing a "no-way out" scenario due to the converging disruptions. Croft cautioned that a full-scale regional war could push Brent past its 2008 record of $148 per barrel, while the current trajectory risks exceeding the 2022 high of $128.
